The Sitdown

After Facebook’s IPO—and lingering questions about whether its ads even work—the world’s leading social network as been on a charm offensive across the ad industry. In its presentations to marketers, it has rolled out research to convince top brands that Facebook ads move product—never mind those lousy click-through rates. Recently, Adweek sat down with Facebook’s sales chief Carolyn Everson and her friend and colleague Rob Norman, the newly named chief digital officer at GroupM, to talk about Facebook’s potential, the state of online advertising, the future of mobile, the Digital Content NewFronts, and death by click-through.

Adweek: Facebook has been making a concerted effort to get out its story on the effectiveness of advertising while talking up its TV-like reach. What’s driving that whole conversation?

Everson: Well, one of the things that Rob and other members of our client council have been helping us think through is just how we talk about Facebook in the market. We’ve been confusing at times, and we’ve now started to realize that as we’ve developed products, that they actually start to ﬁt in the marketing funnel.

So the reach frequency discussion is trying to get people to think about Facebook as a reach product, like TV, and how would you think about the measurement around that, and our offers product, which is arguably driving actual point of purchase, and sort of everything in between. So it’s been a concerted effort to actually start speaking more of the marketer’s language, as opposed to product-centric selling. Or another way of putting it is, make sure whatever we’re doing is actually providing a solution to Rob and his clients, as opposed to me telling him about the latest Facebook product.

Norman: And you’re not alone. And because, you know, Neal Mohan [vp, product] at Google has been talking a lot about measures and expectations of Google’s display in video ad products that are not about clicks. So what we’ve got now for the ﬁrst time, I think, is two of the real monoliths of our business in the digital space talking about non-click metrics and non-last click attribution efforts as well, which has always previously been the property of those people that didn’t have the grip on the throat of those particular metrics.

I think the rest of the industry, for sure, is hoping that if Google and Facebook are out there making a case for it’s not just about clicks, then they’re all thinking, ‘please, God, maybe that attitude will trickle down through the rest of the ecosystem as well.’

Everson: It’s a really important thing for us as an industry. When digital ﬁrst came out, we reduced it down to the click. And brand advertising really has never sort of had its day in even the digital space, let alone… another friend. Many of those reactions are incredibly lightweight and light-touch. And so what Facebook has to demonstrate is that the aggregation of many, many light-touch interactions overlaid with very ﬁne targeting complemented by sharing in virality has a similar contribution to richer palette media—even though it may not in and of itself be as rich a creative palette.

Norman: And of course, what they do have is an enormously rich palette on Facebook Timeline in that the brand owner can create whatever the brand owner wants. And it’s about how you take those elements of Timeline, work out which bits are most resonant organically for your audience, and then work out how much fuel—ignition if you like, which is paid media in this context—you have to pour on that in order to take the ones that a propensity for sharing in action is obvious from the organic activity and move that out at scale. And, you know, Carolyn has got a long way to go on that. But to suggest that the only resolution for any medium is to ape the visual richness of the most visually rich medium is kind of, I think, slightly naïve.

Everson: I think from a Facebook perspective, there are a few big reasons why the reach and frequency sort of piece was entered into the dialogue. One, we ﬁrmly believe that mobile is going to overtake TV in terms of time spent, soon. That does not mean that both of those screens are not going to be used together. But if you talk to an automotive company or if you talk to a CPG [marketer] or any client that wants mass brand awareness and reach, they are looking for alternative vehicles outside of TV. And if you assemble the Facebook audience on any given day, we’re ﬁve Super Bowls.

Adweek: But the Super Bowl takes over the TV screen. Don’t you guys want more in-your-face ads like that?

Everson: Do I want a homepage-takeover ad? No.

Norman: This is not a knock. And Carolyn’s heard me say this 100 times before. I think one of the challenges that marketers have faced is that the understanding of the way that the Facebook News Feed is algorithmically driven was not terribly great at the time that marketers were spending money building very large popularity and interaction in the price that you pay. But that’s a very, very difficult piece of communication for Facebook, and I think one of the things you have to kind of get at.

Everson: There’s a ﬁnancial incentive to have engaging content from a marketer. Rob’s precisely right. So that is not the easiest message. But the analogy would be, imagine if your Super Bowl spot, your price was different depending on how great your creative was. To some degree, that’s how our News Feed works, because, we start with the user, right? The better content we get into your News Feed, Rob’s and mine, the more engaged you’re going to be. And so it’s constantly trying to learn. And what do you like? What do you comment on? Which friends do you interact with more? Which brands do you interact with more? And it’s really just from being a very mission-based company, which [means] the marketing eventually should be as good as the content you get from your best friend.

Adweek: What do you think about what these guys are doing with the exchange business?

Norman: We love it. We absolutely love it. Massive, massive, massive increase in the amount of exchange traded media. We think it’s probably quadrupled the market in terms of availability of total impressions. We’ve got a bunch of clients engaged. I think the challenge for Facebook is, can you become a victim of your own success? Because if we start seeing spectacular results from the Facebook exchange… and Facebook’s been very clear to us about saying, “You know, please note this is an ‘and,’ not an ‘or’ for your clients.” But that’s kind of hard. It’s a hard thing to sustain. And so what it’s going to do for us is get more clients getting more effectiveness stories on Facebook. And what it’s going to do for Facebook, I hope, is it is going to push Facebook harder and faster to build the real premium and the real premium products.

Adweek: Right. Because you don’t want brands to start thinking you guys as just a [direct response] exchange company, right?

Everson: So we are very excited about Facebook Exchange. We’re excited about the results that we’ve seen. Our performance so far in the Exchange is doing better thanthe Google Exchange, and Triggit and others have all spoken up on our behalf. So you should take their data, not mine. There are two things happening on our Exchange product right now, and one is that people are engaged more, they’re actually clicking through. And the second is that the [cost per action] is actually much cheaper on Facebook. So we have more engagement and it’s cheaper cost, and it’s much more efficient.

Adweek: Isn’t that a big contradiction in messaging? You’re touting performance success and clicks while you’re trying to get off the click?

Everson: Well no, that’s why–and when you first asked the question about reach and frequency–I think the pendulum swung really far. It’s not about “the click is dead.” What I try to say is, this is not a pendulum that should go so far one way or so far the other way.

Norman: So the short answer to your question is that every advertiser cares about exactly the same thing. And the thing they care about is outcomes. And they care about outcomes, but they care about many different kinds of outcomes. And what’s happened is, we’ve had too much centricity to one kind of outcome in the past.

Adweek: What did you guys think of the Digital Content NewFronts? [Under the aegis of partners including Digitas, Google, Microsoft and AOL and launched in April of this year, the two week long, New York-based event—which emulates and takes its name from the TV networks’ annual advertiser negotiations known as the Upfronts—brought together digital media distributors, advertisers and content creators.]

Norman: Two things. One, I absolutely deep respect for Digitas and their efforts to pull that together. I think it’s fundamentally wrong. I think it should be an industryowned and controlled [event], not a forprofit thing, in order to get the full engagement. And I think that’s important from the client point of view and the agency point of view, that I think it needs reorganizing, although I love…the guys for doing what they did. Big respect. That’s No. 1. The second is, there’s a difference between the NewFronts and an Upfront. The Upfront is a futures market. A futures market is where you make decisions about the price and the engagement with inventory in advance, knowing that you’re taking a concomitant risk by not taking it if the scatter market goes against you. It’s a futures market.

Adweek: Facebook didn’t have [an event at the NewFronts], Carolyn. And obviously you’re not in the content business. Do you want to go there?

Everson: Look, like Rob, we applaud any efforts, to get anybody in our industry to see what the new opportunities are and to think differently. I think Digitas did a great job at getting a lot of folks into a room and seeing the content possibilities in digital versus traditional TV screen. So we applaud the effort. We didn’t participate. It wasn’t sort of a big thing like, should we or should we not. We frankly had our fMC event in February, where we really went out with our brand Timeline page and how we were thinking about News Feed and how we were going to evolve to mobile. And so we sort of told our story there.

Adweek: But surely you’d like to get in on these video dollars, right?

Everson: So you know, I don’t think about, can we get in on the video upfront market and/or can we take a percentage of the TV Upfront market and shift it to Facebook? And I think part of that may be just the nature of where we are as a company. Our relationships with our largest marketers who are participating in the TV Upfront, they sit down and they literally put a whole plan in place of how they’re going to work with us over the year. So for me it’s not, “I want your video money.” Now you know Rob, you should tell me, maybe we’re doing something wrong and that we should say, “I need video money.”

Norman: I mean, I think if I were you, one of the things that I would be scratching my head about generally—and I said this to some of your colleagues the other day—is that given the percentage of all YouTube videos that are consumed on your platform, wouldn’t it be nice if you could monetize that consumption in some way?

Adweek: Yeah, why not charge YouTube 30 percent of its revenue on Facebook like you do Zynga?

Norman: I don’t know the answer to that question, and maybe that’s it. Not my place.

Adweek: What about mobile for Facebook?

Norman: My perspective on this is that there’s some really, really juicy markets for the mobile sector to go after that are extremely high value in the same way that Google search was, in many ways, built on massive departures from classified advertising. I think that the potential for Facebook in mobile to kick massive great holes in the coupon marketing in the FSI market is huge.

Everson: Look, from our perspective, we think mobile is the single biggest collective opportunity that we have as marketers, as Facebook, industrywide. [In fact, Facebook revealed that 14 percent of its ad revenue now comes from mobile during its Q3 earnings].

Adweek: But isn’t the size of phone screens a problem no matter what for brand advertising?

Everson: I don’t think so.

Norman: It depends what you mean by…I mean, brand advertising takes many, many, many, many, many different forms. So the point is that mobile phones may not be the greatest vehicle for brand advertising, but it [has] enormous potential for the delivery of brand experiences. And so we just need to kind of be a little more flexible with the lexicon to understand what we’re talking about.

Everson: We cannot just take the TV ads, right, and just stick them on mobile and think, that’s all we have to do. We have to make it a utility.

After Facebook’s IPO—and lingering questions about whether its ads even work—the world’s leading social network as been on a charm offensive across the ad industry. In its presentations to marketers, it has rolled out research to convince top brands that Facebook ads move product—never mind those lousy click-through rates. Recently, Adweek sat down with Facebook’s sales chief Carolyn Everson and her friend and colleague Rob Norman, the newly named chief digital officer at GroupM, to talk about Facebook’s potential, the state of online advertising, the future of mobile, the Digital Content NewFronts, and death by click-through.

Adweek: Facebook has been making a concerted effort to get out its story on the effectiveness of advertising while talking up its TV-like reach. What’s driving that whole conversation?

Everson: Well, one of the things that Rob and other members of our client council have been helping us think through is just how we talk about Facebook in the market. We’ve been confusing at times, and we’ve now started to realize that as we’ve developed products, that they actually start to ﬁt in the marketing funnel.

So the reach frequency discussion is trying to get people to think about Facebook as a reach product, like TV, and how would you think about the measurement around that, and our offers product, which is arguably driving actual point of purchase, and sort of everything in between. So it’s been a concerted effort to actually start speaking more of the marketer’s language, as opposed to product-centric selling. Or another way of putting it is, make sure whatever we’re doing is actually providing a solution to Rob and his clients, as opposed to me telling him about the latest Facebook product.

Norman: And you’re not alone. And because, you know, Neal Mohan [vp, product] at Google has been talking a lot about measures and expectations of Google’s display in video ad products that are not about clicks. So what we’ve got now for the ﬁrst time, I think, is two of the real monoliths of our business in the digital space talking about non-click metrics and non-last click attribution efforts as well, which has always previously been the property of those people that didn’t have the grip on the throat of those particular metrics.

I think the rest of the industry, for sure, is hoping that if Google and Facebook are out there making a case for it’s not just about clicks, then they’re all thinking, ‘please, God, maybe that attitude will trickle down through the rest of the ecosystem as well.’

Everson: It’s a really important thing for us as an industry. When digital ﬁrst came out, we reduced it down to the click. And brand advertising really has never sort of had its day in even the digital space, let alone… another friend. Many of those reactions are incredibly lightweight and light-touch. And so what Facebook has to demonstrate is that the aggregation of many, many light-touch interactions overlaid with very ﬁne targeting complemented by sharing in virality has a similar contribution to richer palette media—even though it may not in and of itself be as rich a creative palette.

Norman: And of course, what they do have is an enormously rich palette on Facebook Timeline in that the brand owner can create whatever the brand owner wants. And it’s about how you take those elements of Timeline, work out which bits are most resonant organically for your audience, and then work out how much fuel—ignition if you like, which is paid media in this context—you have to pour on that in order to take the ones that a propensity for sharing in action is obvious from the organic activity and move that out at scale. And, you know, Carolyn has got a long way to go on that. But to suggest that the only resolution for any medium is to ape the visual richness of the most visually rich medium is kind of, I think, slightly naïve.

Everson: I think from a Facebook perspective, there are a few big reasons why the reach and frequency sort of piece was entered into the dialogue. One, we ﬁrmly believe that mobile is going to overtake TV in terms of time spent, soon. That does not mean that both of those screens are not going to be used together. But if you talk to an automotive company or if you talk to a CPG [marketer] or any client that wants mass brand awareness and reach, they are looking for alternative vehicles outside of TV. And if you assemble the Facebook audience on any given day, we’re ﬁve Super Bowls.

Adweek: But the Super Bowl takes over the TV screen. Don’t you guys want more in-your-face ads like that?

Everson: Do I want a homepage-takeover ad? No.

Norman: This is not a knock. And Carolyn’s heard me say this 100 times before. I think one of the challenges that marketers have faced is that the understanding of the way that the Facebook News Feed is algorithmically driven was not terribly great at the time that marketers were spending money building very large popularity and interaction in the price that you pay. But that’s a very, very difficult piece of communication for Facebook, and I think one of the things you have to kind of get at.

Everson: There’s a ﬁnancial incentive to have engaging content from a marketer. Rob’s precisely right. So that is not the easiest message. But the analogy would be, imagine if your Super Bowl spot, your price was different depending on how great your creative was. To some degree, that’s how our News Feed works, because, we start with the user, right? The better content we get into your News Feed, Rob’s and mine, the more engaged you’re going to be. And so it’s constantly trying to learn. And what do you like? What do you comment on? Which friends do you interact with more? Which brands do you interact with more? And it’s really just from being a very mission-based company, which [means] the marketing eventually should be as good as the content you get from your best friend.

Adweek: What do you think about what these guys are doing with the exchange business?

Norman: We love it. We absolutely love it. Massive, massive, massive increase in the amount of exchange traded media. We think it’s probably quadrupled the market in terms of availability of total impressions. We’ve got a bunch of clients engaged. I think the challenge for Facebook is, can you become a victim of your own success? Because if we start seeing spectacular results from the Facebook exchange… and Facebook’s been very clear to us about saying, “You know, please note this is an ‘and,’ not an ‘or’ for your clients.” But that’s kind of hard. It’s a hard thing to sustain. And so what it’s going to do for us is get more clients getting more effectiveness stories on Facebook. And what it’s going to do for Facebook, I hope, is it is going to push Facebook harder and faster to build the real premium and the real premium products.

Adweek: Right. Because you don’t want brands to start thinking you guys as just a [direct response] exchange company, right?

Everson: So we are very excited about Facebook Exchange. We’re excited about the results that we’ve seen. Our performance so far in the Exchange is doing better thanthe Google Exchange, and Triggit and others have all spoken up on our behalf. So you should take their data, not mine. There are two things happening on our Exchange product right now, and one is that people are engaged more, they’re actually clicking through. And the second is that the [cost per action] is actually much cheaper on Facebook. So we have more engagement and it’s cheaper cost, and it’s much more efficient.

Adweek: Isn’t that a big contradiction in messaging? You’re touting performance success and clicks while you’re trying to get off the click?

Everson: Well no, that’s why–and when you first asked the question about reach and frequency–I think the pendulum swung really far. It’s not about “the click is dead.” What I try to say is, this is not a pendulum that should go so far one way or so far the other way.

Norman: So the short answer to your question is that every advertiser cares about exactly the same thing. And the thing they care about is outcomes. And they care about outcomes, but they care about many different kinds of outcomes. And what’s happened is, we’ve had too much centricity to one kind of outcome in the past.

Adweek: What did you guys think of the Digital Content NewFronts? [Under the aegis of partners including Digitas, Google, Microsoft and AOL and launched in April of this year, the two week long, New York-based event—which emulates and takes its name from the TV networks’ annual advertiser negotiations known as the Upfronts—brought together digital media distributors, advertisers and content creators.]

Norman: Two things. One, I absolutely deep respect for Digitas and their efforts to pull that together. I think it’s fundamentally wrong. I think it should be an industryowned and controlled [event], not a forprofit thing, in order to get the full engagement. And I think that’s important from the client point of view and the agency point of view, that I think it needs reorganizing, although I love…the guys for doing what they did. Big respect. That’s No. 1. The second is, there’s a difference between the NewFronts and an Upfront. The Upfront is a futures market. A futures market is where you make decisions about the price and the engagement with inventory in advance, knowing that you’re taking a concomitant risk by not taking it if the scatter market goes against you. It’s a futures market.

Adweek: Facebook didn’t have [an event at the NewFronts], Carolyn. And obviously you’re not in the content business. Do you want to go there?

Everson: Look, like Rob, we applaud any efforts, to get anybody in our industry to see what the new opportunities are and to think differently. I think Digitas did a great job at getting a lot of folks into a room and seeing the content possibilities in digital versus traditional TV screen. So we applaud the effort. We didn’t participate. It wasn’t sort of a big thing like, should we or should we not. We frankly had our fMC event in February, where we really went out with our brand Timeline page and how we were thinking about News Feed and how we were going to evolve to mobile. And so we sort of told our story there.

Adweek: But surely you’d like to get in on these video dollars, right?

Everson: So you know, I don’t think about, can we get in on the video upfront market and/or can we take a percentage of the TV Upfront market and shift it to Facebook? And I think part of that may be just the nature of where we are as a company. Our relationships with our largest marketers who are participating in the TV Upfront, they sit down and they literally put a whole plan in place of how they’re going to work with us over the year. So for me it’s not, “I want your video money.” Now you know Rob, you should tell me, maybe we’re doing something wrong and that we should say, “I need video money.”

Norman: I mean, I think if I were you, one of the things that I would be scratching my head about generally—and I said this to some of your colleagues the other day—is that given the percentage of all YouTube videos that are consumed on your platform, wouldn’t it be nice if you could monetize that consumption in some way?

Adweek: Yeah, why not charge YouTube 30 percent of its revenue on Facebook like you do Zynga?

Norman: I don’t know the answer to that question, and maybe that’s it. Not my place.

Adweek: What about mobile for Facebook?

Norman: My perspective on this is that there’s some really, really juicy markets for the mobile sector to go after that are extremely high value in the same way that Google search was, in many ways, built on massive departures from classified advertising. I think that the potential for Facebook in mobile to kick massive great holes in the coupon marketing in the FSI market is huge.

Everson: Look, from our perspective, we think mobile is the single biggest collective opportunity that we have as marketers, as Facebook, industrywide. [In fact, Facebook revealed that 14 percent of its ad revenue now comes from mobile during its Q3 earnings].

Adweek: But isn’t the size of phone screens a problem no matter what for brand advertising?

Everson: I don’t think so.

Norman: It depends what you mean by…I mean, brand advertising takes many, many, many, many, many different forms. So the point is that mobile phones may not be the greatest vehicle for brand advertising, but it [has] enormous potential for the delivery of brand experiences. And so we just need to kind of be a little more flexible with the lexicon to understand what we’re talking about.

Everson: We cannot just take the TV ads, right, and just stick them on mobile and think, that’s all we have to do. We have to make it a utility.